Published 4:00 am, Monday, April 10, 2006

A two-unit building near Golden Gate Park with a spacious yard out back and a leafy tree in front is just one of hundreds each year where buyers are moving in after renters were evicted -- a growing real estate trend some San Francisco lawmakers hope to curb.

What is different about this Inner Richmond District property on Funston Avenue is that the hopeful buyer is a top aide to Mayor Gavin Newsom, his communications director Peter Ragone.

Ragone wants to buy a tenancy-in-common in a building where the tenants, including two who claimed to be disabled, were evicted when the landlord invoked the Ellis Act, a controversial state law that gives property owners looking to get out of the rental market a legal means of evicting tenants.

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Tenants' rights activists are rallying against the Ellis Act because they say it is being abused and used as a tool to price lower-income renters out of San Francisco to make room for those who can afford to buy homes. Ellis Act evictions have been the focus of recent legislation at the Board of Supervisors, and this year Newsom vetoed two measures that sought to reduce evictions.

Now Ragone, the public face of Newsom's administration, is in the midst of the very type of real estate transaction that is fodder for heated debates inside City Hall.

And like many buyers of properties following Ellis Act evictions, Ragone says the impact of the transactions on the tenants is the responsibility of the former landlord and seller, not a buyer like himself.

"If indeed there was a disabled tenant who was evicted by the trust fund babies who own the property, it's clear they should, if they haven't already, provide significant compensation to the people they evicted," he said.

Ragone's efforts to buy the Funston unit with his wife, Janine O'Neill, were first reported last week on the Internet site Beyond Chron, a blog run by a San Francisco tenants' rights activist.

In 2004, the couple agreed to purchase the top unit in a two-unit tenancy-in-common, or TIC, for $655,000, documents show. The sale, however, is pending because they filed a lawsuit later that year against the owners of the building and others involved in the sale.

Among the allegations in the suit was one that the owners did not transfer the property to Ragone and his wife in the condition it was in when the couple signed sale documents.

TICs are an increasingly popular real estate transaction among first-time home buyers in San Francisco in which a group of people collectively owns a building and shares the mortgage, but live in separate units. The goal, typically, is to convert the building into more lucrative condominiums.

A woman who lived in the lower unit suffered from schizophrenia, and her disability was classified by the state Department of Rehabilitation as the highest level of severity, according to a letter on file with the Rent Board that was written by her attorney. A man who lived in the same unit had limited walking ability and possessed a handicapped parking permit, documents showed.

Being disabled, the pair was allowed to stay in the building for a year after the eviction notice was issued, as required by the city's rent ordinance.

Ragone said that when he signed papers to buy the property he assumed tenants had been evicted under the Ellis Act.

One document related to the sale bearing Ragone's signature said the building had undergone an Ellis Act eviction, and another with his signature said it was unclear whether one had occurred.

On Thursday, Newsom declined to comment, saying he did not have enough facts on the case.

"I can't get involved in peoples' personal lives," he said. "Nothing's been alleged that there's something wrong or illegal."

Earlier this year, Newsom vetoed an ordinance that would have required a Planning Commission hearing whenever a multiunit building is to be converted into condominiums, saying it would not solve San Francisco's affordable housing shortage. He also vetoed legislation that would have required property owners to disclose the evictions of disabled or elderly tenants to all potential home buyers. That measure will be on the June ballot.

Recently, Board of Supervisors PresidentAaron Peskin introduced yet another piece of legislation that will receive public hearings later this year -- one that would prohibit any building where an Ellis Act eviction occurred from ever being eligible for conversion to condominiums.

Some at City Hall take issue with Ragone's efforts to purchase a TIC in a building where tenants were evicted, given his high profile job in the Newsom administration.

"The conventional wisdom inside City Hall is he (Ragone) is the main shot caller inside the administration," said Supervisor Chris Daly, a staunch Newsom critic who proposed the two eviction measures that were vetoed by the mayor. "If Peter Ragone exercises undue influence on items where he may financially benefit, for me that's the most significant question."

Ragone said he had not advised Newsom on his decision to veto the eviction legislation.

"Apparently," Ragone said, "they don't know how government works so here is a civics lesson: I'm the press secretary, not the policy director. The mayor tells me what his policies are, and I help communicate them to the public."